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TagsDemocrats and Republicans hurrying measure through Legislature
The cost of basic landline telephone service could rise by as much as $100 a-year if a bill being hurried through the Legislature becomes law, according to a report released Monday by two public interest groups.
The report, by New Jersey Policy Perspective, a Trenton-based think tank, and Demos, cites a 2009 survey by the National Association of State Utility Consumer Advocates that found landline phone rates climbed in 17 of 20 states that deregulated the service. The increases ranged from 8 percent to 100 percent.
The report comes as opponents and supporters of the legislation (S2664) have begun a lobbying push in advance of an expected final vote by the Senate before the end of the month. Supporters argue the proposal removes outdated rules.
"Should the Legislature adopt legislation which has the almost overwhelmingly likely consequence of raising telephone rates for no good reason?" former New York Assemblyman Richard Brodsky, one of the authors of the report, stated. "This will affect rural areas, senior citizens and cities most particularly, because that's where the bulk of the people still dependent on the old copper wire system live."
The report declares, for example, that deregulated landlines would turn Verizon’s assets into a “cash cow” that it could sell off without regulatory oversight.
Verizon New Jersey President Dennis Bone disagrees. He told The Star-Ledger that rates have already gone up with regulations in place. He added that he feels the report is “just filled with lies, false assumptions and fiction.”
"The regulations over us were put on the books back when Model Ts were traveling up and down Broad Street,” Bone told the newspaper.
Opponents of the proposal, including state Ratepayer Counsel Stefanie Brand, argue it will hurt consumers.
“If this bill goes into effect, prices for things that are not already competitive are going to go up and we’re going to lose significant consumer protection,” Brand told The Star-Ledger.
The bill, which is sponsored by top Democrats and Republicans, including Sen. Raymond J. Lesniak (D-Union), Senate President Stephen M. Sweeney (D-Gloucester) and Senate Republican Leader Tom Kean (R-Union.). The bill overwhelmingly passed the Assembly last month.
The state Board of Public Utilities currently regulates most basic telephone service. The rate is currently set at $16.45 before taxes and fees.
The president of New Jersey Policy Perspective, Deborah Howlett, told The Star-Ledger that while rates have indeed gone up, “there are still protections for consumers” under the current rules.
Under the proposal, phone companies would still have to provide discounted service to low-income elderly residents under the state’s Lifeline program. The regulations would only be lifted in competitive markets. The measure considers mobile phone networks, which cover virtually the entire state, competition.
– TOM HESTER SR., NEWJERSEYNEWSROOM.COM
In 2006, the Legislature passed a 'system-wide' (really statewide) franchising law. This is what allowed Verizon to start offering its FiOS service. Verizon was the only company that could afford to do this because a) it was part owner of the poles; b) it already had plant on the poles; and c) it needed to upgrade its facilities anyway. As a result of that bill, Verizon invested over $1B (that's right, one Billion with a "B") dollars in its network in NJ. The bill also allows any existing cable company to convert to a system-wide franchise, to get out from under what they consider to be a burdensome and time-consuming local franchising process. The investments and jobs that came out of 'deregulation' in other states (none of which went as far as this bill does) came about here because we've already done it!
The investments and jobs that come with this bill (to the extent there are any) will come in the form of Verizon investing in its cellular wireless network in NJ, using the proceeds from selling its copper infrastructure, which it wants to get away from. Tell me, if you lived in one of the 175 towns in Verizon's territory that are not scheduled to ever get FiOS, would you be happy with that Triple-Play service from your cellular provider, or your satellite provider? No? Of course not - THEY DON'T OFFER IT. In the towns where Verizon does not offer FiOS and where CenturyLink operates (217 total), there is no real competition for your landline telephone business. And no amount of deregulation is going to attract anyone to provide a state-of-the-art fiber network like FiOS where it's rural or semi-rural, and just not lucrative enough. The only company with the resources is going to put it into wireless ("Can you hear me now?")
Of course the unions oppose this legislation, but for consumers its an important step in bringing in more choices and getting better pricing and services. Its only common sense: more cable companies competing will lead to more concessions to consumers.